Making Markets Quarterly Market Recap: Q2 2025 - [Making Markets, EP.63]
Jul 18, 2025
In this discussion, market strategist Matt Bessent shares insights into the recent market turbulence with Eric Golden. They examine the unexpected volatility caused by tariff announcements and its effects on investor sentiment. The duo explores how geopolitical tensions impact market stability, while also revealing the intricate relationship between algorithmic trading and market fluctuations. Additionally, they explore Bitcoin's rising presence in investment portfolios alongside the Federal Reserve's challenges in navigating economic complexities.
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Markets Overreact to Tariff Surprises
- Markets overreact to unexpected tariff announcements, causing short-term volatility spikes.
- However, markets eventually adjust and often return to a longer-term more balanced outlook.
Volatility's Faster, Sharper Cycles
- Market volatility has gotten shorter and more intense due to algorithmic and high-frequency trading.
- Volatility spikes happen faster but also correct faster than they did a decade ago.
Trump 2.0's Stronger Execution
- Trump's second term shows heavier reliance on loyalists and a higher chance of following through on announced actions.
- The tariffs shock taught a lesson acting as a market guardrail for Trump 2.0 behavior.